Moody's assigns Double Eagle B2, notes B3

Moody's Investors Service said it assigned first-time ratings to Double Eagle III Midco 1 LLC, including a B2 corporate family rating, B2-PD probability of default rating and B3 rating to its proposed $650 million senior unsecured notes due 2025.

Double Eagle's B2 CFR mirrors its modest scale, focus on the Midland Basin, the high proportion of proved undeveloped reserves and aggressive growth plans that will produce significant negative free cash flow through 2021, Moody’s said.

“The proposed senior unsecured notes are rated B3 because of the priority claim and significant size of the secured revolver in Double Eagle's capital structure. The secured borrowing base revolving credit facility has a first-lien over substantially all of Double Eagle's assets. The proposed notes will have guarantees from all of Double Eagle's existing subsidiaries on a senior unsecured basis,” Moody’s said in a press release.

Proceeds will be used to repay Double's Eagle's term loan and borrowings under its revolving credit facility and to increase cash liquidity.

The outlook is stable.

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